FCC's Spectrum Auction Approaches $20B in Bids

An anonymous reader writes "After 32 rounds, the FCC has raised more than $18.8 billion in its 700-MHz auction, well surpassing its own early estimates of attracting between $10-15 billion in offers. That's undoubtedly good news for the agency. Since the auction began on Jan. 24, both the FCC and wireless experts have expressed ongoing concerns about meeting those estimates. Once the auction was underway, those worries were compounded by a shaky economic forecast and the possibility of a looming recession."

FCC '08 Budgetary Resources are $433 Million

According to their budget sheet [fcc.gov] (133 page PDF warning), their proposed budgetary resources for 2008 is $433 million.

As I haven't been following the news very closely, does anyone know where this $20 billion will go?

I, like many Americans, am ghastly concerned with how my government spends money. I hope that the FCC doesn't pull an M.C. Hammer and put spinners on their pocket protectors or pass out diamond studded platinum iPods to all of its friends. Will this money be put under control of congressional spending? Will this money be put in a fund to supply the FCC with emergency regulation cash?

You're going to suddenly have over 40 times the amount of resources you normally have. Even if they went nuts and ordered yet another all marble Parthenon-dupe building in DC they couldn't burn all this cash. Please don't be stupid.

Mod the truth down, but it's still the truth

I, like many Americans, am ghastly concerned with how my government spends money.

Define "many". Most don't seem to give a damn because it's generally someone else's money.

they couldn't burn all this cash.

I'm guessing you are a recent immigrant? Welcome to the USA, where the government can burn through an arbitrarily large amount of money in an arbitrarily small span of time.

spinners on their pocket protectors

I totally want to spread that as a meme.

Re:FCC '08 Budgetary Resources are $433 Million

As I haven't been following the news very closely, does anyone know where this $20 billion will go?

Just like all other government revenue, it'll be put into the general fund under the jurisdiction of congress. The FCC won't get to keep any of it and will have to go ask congress if they want more money.

Re:FCC '08 Budgetary Resources are $433 Million

Because the FCC can now approach Congress with: "Look! We made $XX billion last year for you! We need some more money."

Congress, of course, won't realize that these auctions are a very limited-use thing. They can't re-auction them every year.

Re:

well, $1.5B is surely going to go toward paying for the digital-tv voucher program. that's probably above and beyond the $433M budget you posted.

that still leaves $18B unaccounted for, but it's a start

Re:FCC '08 Budgetary Resources are $433 Million

In other news, the Republican presidential campaign received an unexpected boost today from an anonymous donor.

Misses the big story

The current bidding for the C block has NOT stalled at $4.71 billion as the story states. A new bidder [nytimes.com] upped the bid to $4.74 billion a few days ago. This was made possible because there are 2 ways of bidding for the C block: either outright for the whole block, where the bidding reached $4.71 billion, or for 8 pieces of the block individually. If the cumulative price for the bidding of the 8 pieces exceeds the bid for the whole block, then that bid trumps the whole block bid. The cumulative bid for the 8 pieces now stands at $4.74 billion, which means that the C block is still under contention. Today's latest story [nytimes.com] from the NYT gives more info on the auction.

20 billion dollars?

About 2.5 weeks of interest payments to service the debt. [treasurydirect.gov]

Oh well

I figured my $50 bid wouldn't fly, but a man can dream.

In a similar vein

I'm auctioning the oxygen inside FCCs Washington offices, who'll start me at $1 billion?

Where have I seen this before?

Oh yes, the 3G spectrum auctions in Europe [wikipedia.org] .

Re:Where have I seen this before?

Yes, the 3G auctions in the end did neither the operators nor the subscribers much good. The operators find that they are so burdened with debt that they have to press high charges on fragile business models. Mobile data is very, very useful but access is too expensive in many places for applications to be established. In fact although 3G has been around in Europe for several years now using it has been too expensive for most people.

Off-topic: Self-fulfilling recession prophecy?

Some analysts say "looming recession", people think "Oh noes" and stop buying stuff/investing => recession.

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Some analysts say "looming recession", people think "Oh noes" and stop buying stuff/investing => recession.

Yay \o/ that means I'm not the only Slashdotter who watches the Daily Show with Jon Stewart! (For those who don't watch, a guest explained that

Re:

The economy is an act of collective faith, all based on promises. Those pieces of green paper in your pocket? They have value only if people believe they have value. If they stop agreeing it all disappears. Can this lead to recession? Sure, but that'

Could someone please explain to me ...

what business exactly does a government have selling a unique public resource to some private interest (thus automatically establishing a govenment backed monopoly), rather then presiding over equitable sharing and access to the said resource by all citizens?

Re:Could someone please explain to me ...

"Equitable" as in for example estabilishing a publicly-owned access infrastructure along with the rules of accessing it, say like, oh I dunno ... roads? Electrical grid?

This is no different, merely a different set of technical issues has to be addressed. Note that this does not imply government running a "business" but rather a type of civil engineering activity governments were involved in since times immemorial, such as road and bridge building.

The "sounding pretty smart to you" method involves selling what is not theirs to sell, in order to allow some monopolist to gouge the public unopposed, while the government gets to pocket a one time bribe and spend it promptly on some wacko foreign military adventure, thus throwing the money down the drain with no return possible to the taxpayer.

In this way the worst possible outcome is achieved: a unique public resuorce is effectively stolen by private interests in exchange for a bribe and the general public is shafted with no recourse.

This idiotic scenario is a direct equivalent of a government selling all roads and bridges in the country to the highest bidder, thus ensuring that toll-booths pop up right at the end of everybody's drive-way asking for $10 fee to travel every yard or some such, regardless of the direction you take driving, cycling or walking.

=wireless tax

This is nothing more than a shameless tax on a free medium -- the wireless spectrum.

Historically the FCC has always accepted bids almost without regard to how the winner will use the spectrum and it's overall benefit to the consumer. This time round they have the requirement that the spectrum will be 'somewhat' open to competition by forcing the winner to allow any compatible device to use the spectrum.

But by allowing bids of +$4 billion they leave the winner no choice but to stick it to the consumer in order to get their money back. And that will come in the tried and true method of nickel and diming us for every trivial service they can think of.

The winners in this auction should be the ones who have the best ideas that will best benefit the consumer, *not* the ones who come up with the most bucks. I mean, did the FCC even consider that the 700Mhz part of the spectrum would probably be best used for a meshed Internet and that MIT already has a working prototype for such a network? Sadly we probably just gonna get another phone network based on the old 20th century model that maximizes profit and stifles innovation.

Re:Great News!

I think we should be more worried about paying down our debt http://www.brillig.com/debt_clock/ [brillig.com] than the trillion dollar budget. And even still $20b $1t. Especially considering that the dollar is down in value which makes that number look even worse when we pay out to foreign companies.

Layne

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Especially considering that the dollar is down in value which makes that number look even worse when we pay out to foreign companies.

Except most foreign countries hold US debt in ... American dollars. So foreign countries have every incentive to help ou

Re:Great News!

I don't know if I'm having one of those days where everything is just delightfully funny, but having followed your link there, I came to this page. [treasurydirect.gov]

Hilarious stuff, well, maybe not. Until you get to the bottom of the page, where you come to this little gem:

How do you make a contribution to reduce the debt?

Make your check payable to the Bureau of the Public Debt, and in the memo section, notate that it is a Gift to reduce the Debt Held by the Public. Mail your check to:

Attn Dept G
Bureau Of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188

1T/yr was pre-W, now 2T/yr is the mark

Yes, that's right, a federal budget growth of more than 10% per year, with no new revenue to offset spending. Who was it that we were supposed to elect to get fiscal responsibility?

I really wish Mark Warner [wikipedia.org] were running for president.

Re:and yet

It is important to understand what deficit spending is and the rationale behind it. Deficit spending is borrowing money to pay for government activity instead of paying for that activity with tax revenue. The (highly suspect) rationale is that you don't have to raise taxes to get the same results and can thereby dodge the economic problems associated with higher taxation. By borrowing, the liability is passed on to future tax payers where - according to the theory - the economic growth it has fostered will make the debt easier to pay off. It's like starting a business: borrow money so you can build up a company that will eventually grow enough to pay off the initial debt and then some. The problem is that when you're always borrowing this forms a never-ending cycle that causes inflation and thereby reduces real earnings and purchasing power, so the 'growth' that is fostered shoots itself in the foot. It ends up being a case of robbing Peter to pay Paul.

So why is deficit spending attractive? For several reasons. Politically, it is easy to sell "lower taxes!" For the political Right, it is also a way to shovel money into the pockets of the wealthy: about 1/3 of the debt is loaned to the government by rich people in the form of verystable investments - T-Bills, bonds, etc - at around 9% interest.

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verystable investments - T-Bills, bonds, etc - at around 9% interest.

Yes, except last time I looked t-bills were at 2.2% and t-bonds were at 3.6% - stable but, will it keep up with the inflation you talked about?

Re:

The idea behind tax cuts is that the closer you get to the Laffer curve [wikipedia.org], the closer you get to maximizing tax revenue while minimizing economic damage. If that means temporarily running deficits, OK. Think about it: who gets a higher return on capital, t